In 1757, the 9th Je Khenpo, Gyalwang Shakya Rinchen Rinpoche, considered to be a reincarnation of Rechung Dorje Drakpa, founded the Nalanda Monastery in Punakha.

The original Nalanda University is located in what was known as Magadha that is now near present-day Patna, the capital of the present day state of Bihar, India.

On arrival in India, people from Bhutan faced many difficulties including dealing with differences in food, culture, and language, as well as being in an unfamiliar place.

Gyalwang Shakya Rinchen Rinpoche suspected that maybe these vultures were the eight original scholars (pandits) from Nalanda University in India.

Based on the selection of this site by the vultures and the dream of the eight scholars, this location was chosen as the place where he built Nalanda Monastery.

During Gyalwang Shakya Rinchen's lifetime, Nalanda Monastery in Bhutan was a thriving Buddhist teaching institution with a renowned reputation.

After Gyalwang Shakya Rinchen's final thugdham (dzongkha) /maha Samādhi (pali/sanscrit), slowly the teachings stopped and the great institute lay dormant.

While constructing the original temple of Nalanda in Bhutan, Gyalwang Shakya Rinchen Rinpoche saw eight men from India in a small valley next to the building site.

Each of these great scholars wrote extensive, elaborate, and profound Buddhist philosophical commentaries that are still studied today throughout monasteries and nunneries.

In order to praise and honour them for their auspicious appearance in the valley, Gyalwang Shakya Rinchen Rinpoche himself built clay statues of each of them.

The alcove entrance is flanked by clay and wooden statues of Yarsapa on the left, the protector deity of the valley; and his sister Pelzom Gyalmo, on the right.

On either end of the main altar are alcoves for statues of the eight Indian scholars (the eight pandits of Nalanda University in India who were seen by Gyalwang Shakya Rinchen Rinpoche in the valley) 8 Indian Scholars or Panditas statues known as the Six Ornaments of the Southern Continent and the Two Excellent Ones: One of Shakya Rinchen Rinpoche's main disciples built the original lower temple (Sonam Ghatsel temple) but it was destroyed by fire.

It was rebuilt in the 1960s, during the Fourth King's (Jigme Singye Wangchuck) reign, with the support of the Queen Great Grandmother Ashi Kesang Choden Wangchuk.

A shedra is a Buddhist institute that includes the teaching of Buddhist philosophy, learning and playing of ritual instruments, making ritual cakes called tormas (Skt: balingta), reciting scriptures, conducting prayer ceremonies (pujas) for both special observance days and on behalf of members in the lay community.

It helps the mind to develop greater clarity about the nature of reality that includes the idea of a self and the experience of phenomena[1] Monks join NBI with a wide range of previous mainstream education.

Under the direction and guidance of Khenpo Sonam Tshewang, the first dedicated Translation Class began at Nalanda Buddhist Institute in 2013.

The Translation Class is a three year course where students focus on learning and improving English speaking, vocabulary, reading, and writing skills.

In order to ensure full understanding and accurate translation students, other non-religious subjects are taught, such as planetary science and the secular view of the origin of the universe, basic anatomy and physiology, other religions, and traditions of Buddhism.

The monks will begin lessons that will focus on: learning typing in both English and Dzongkha, using basic software and other computer skills although there is no internet connection.

The monk body (Dratshang Lhentshog) of Bhutan formally recognised him as the reincarnation of Gyalwang Shakya Rinchen Rinpoche.